Former chancellor Alistair Darling has hit out at the decision to strip Fred Goodwin of his knighthood when other senior figures have not been punished.
Darling labelled the treatment meted out to the former Royal Bank of Scotland boss as “tawdry” after the Queen “cancelled and annulled” his award on Tuesday.
Politicians from all parties have backed the decision made by a committee, which decided Goodwin had brought the honours system into “disrepute”. Goodwin now joins notorious figures such as Zimbabwe’s Robert Mugabe and Soviet spy Anthony Blunt in having lost his knighthood.
Prime minister David Cameron said it was the “right decision”, while chancellor George Osborne claimed Goodwin represents “everything that went wrong in the British economy over the last decade”.
The decision was also supported by Labour leader Ed Miliband, who said the punishment was “only the start of the change we need” in boardrooms.
However, some Conservative MPs have expressed their unease with political influence on the City, while Darling has also voiced his concerns in The Times.
Darling, who led negotiations over the RBS bailout when he was chancellor, said: “There is something tawdry about the government directing its fire at Fred Goodwin alone; if it’s right to annul his knighthood, what about the honours of others who were involved in RBS and HBoS?”
Goodwin was awarded his knighthood for services to banking during the last Labour government, but he then led RBS to the edge of collapse in 2008. The bank required a £45bn bailout from the taxpayer.
The Cabinet Office said the size of the RBS disaster made Goodwin an “exceptional” case, even though honours are only normally taken away from individuals who have been convicted and jailed.
The department said: “Both the Financial Services Authority and the Treasury Select Committee have investigated the reasons for this failure and its consequences.
“They are clear that the failure of RBS played an important role in the financial crisis of 2008-9 which, together with other macroeconomic factors, triggered the worst recession in the UK since the Second World War and imposed significant direct costs on British taxpayers and businesses.
“Fred Goodwin was the dominant decision maker at RBS at the time.
“In reaching this decision, it was recognised that widespread concern about Fred Goodwin’s decisions meant that the retention of a Knighthood for ‘services to banking’ could not be sustained.”